You are right. Given the outsized contribution of Ankleshwar plant to the company’s revenues, some revenue loss from the closure was certainly expected. The decline in revenue is certainly more than what a few days of delayed reopening would justify. So, the management seems to have incorrectly downplayed the impact of closure in Q1 call.

Also, I don’t think Argentina contributes much to the company revenues. Management declined to provide the exact percentage, but we know that Glenmark Pharma has a formulation facility in Argentina which earned a revenue of Rs.117 crore in FY24.

Using this, one can assume it has quarterly revenues of around Rs.30 crore and so a small portion (20-25 % ??) of that would be API cost (which become GLS revenues). That would be say Rs.5 to 10 crore per quarter, that’s all.

One analyst pointed out there is pricing pressure in the market due to aggressive pricing by the Chinese. Mr. Rawjee said they are much less impacted as they play more in the regulated markets.

Earlier, he had also pointed to improvement in Gross Margins as proof that there was no pricing pressure. But even in regulated markets, formulation companies do have multiple approved suppliers, and will buy from the lowest cost approved supplier, why not. Further, your Gross Margins can improve even if your own input costs decline more than selling prices. So the impact of Chinese pricing pressure on topline cannot be fully ruled out.

Besides this, there could also be other reasons that are distorting year on year comparison. Loss of PLI benefit this year is one. Alignment of revenue recognition policy with Nirma – which is more conservative – is another.

I for one was certainly expecting a decline in revenues this quarter, and I would be very much surprised if the market wasn’t. But I hope the broader story remains intact. New molecule commercialization under CDMO, new API launches, capex execution and regulatory inspections are the things to track. Early indications from the new promoter are positive, such as stepping up investments in R&D. The broad strategic direction seems fine so far. Let’s see what happens next.

(Disc.: Invested)

When more than 80% of their revenues come from security products and counterfeit tech, why they have no information at all on their offerings? Their ppt has so much info on their water soluble products but just one slide on security. Their website also does not discuss much except some patent info. Well their paper security products may not last too long as authentication is moving to digital. This factors prevent me from increasing my position.

Yesterday, I was trying to understand this company after the stock prices fell drastically. My mindset was to look for reasons buy this share, thus, I wasn’t completely unbiased. Below are the Big Pictures things I found

• Company did the IPO to raise money to open 700 outlets by the end of 2026. Issue price was 60 Rs. Also, if I am not misunderstood, I read that the promoters bought fresh issue at more than 60 Rs, One year prior to the IPO.
• The stock doubled on the first day. On that day, the liquidity was suck in by many institutions, which again increased the stock price and it became 3.5 times at one point within the first 5-7 days.
• With that, the promoters thought of getting out of the stock and they are still selling whenever they get the chance.
• Looking at high valuations, the management did the QIP and raised money at 136 Rs. The stock price then fell.
• In the company, the management wanting to expand aggressively to achieve their obligation to their masters(which actually is the promoter entity!!!), burned a lot of cash. And are still burning.
• Their strategy is the “Barbel Strategy”. Lure people by value and also sell premium items. Their value pack also has a great Gross Margins apparently. They also started BN cafe to increase product lines and they also have better margins(Someone in the thread mentioned about Starbuck’s report on Coffee as beverage.)
• They were, I believe, forced to acquire the Indonesian company by their parent. At one point they are also burning a lot of cash in the Indian market to grow. On the other hand, the Indonesia is also not doing well.
• My observation in this thread is that, initially people said “No one goes to Burger King”. Later, said – “People now a days go to Burger King rather than Macdonalds or KFC, as Burger King offer both the foods that these Two guys offer”.
• By September, 2024, they have 464 restaurants. And they are setting the target of 500 by this year. Which still requires them to open 200 restaurants within next Two years.
• They are doing well technology wise, gross margin wise, SSSG wise and off course Sales growth wise(more restaurants). Still they are losing a lot of money

I might have missed a lot of things here. Let’s see the negatives:

• Promoters selling
• Loss making
• Still a lot of forced expansion left.
• Indonesia

Positives:

• Lowest sales to market cap. Sale are likely to grow more.
• They also have gained popularity for their products.

I have bought very very small amount out of FOMO(And now I tell my self that it’s for tracking purpose), and looking for good reasons to buy significant amount. I see no reason to do that, considering the uncertainty over the next Two years for this stock. I guess that is the reason why it is cheaper. Waiting for people to be more fearful before taking action.

(Just an FYI – Q Int/Sale meaning interest in latest quarter to sales in the latest quarter.)

Talking about other Food Brands:
I also like Barbeque Nation as it is a company owned brand(Not Franchise) which also is a leader Grilled Barbeque. Favoring BN because, it is not bound by their masters and thus can adjust their strategies. Sadly that too is a loss making, but I am optimistic(biased). I own less than 2 percent. In 2 percent profit.

I also own significant Sapphire foods because of (previously) its low valuation(Favorable P/B) compared to Devyani and others in category. (4-6 percent). In somewhat profit here as well.

One more thing that I noticed, and I hope someone can help me understand it better.

• In Ahmedabad, in my area, Burger King is at the best location compared to all the other brands. It is also bigger than other Fast food chains.
• KFC is a bit far, has Two floors and quite small.
• Barbeque Nation is often seen up on the First floor. It’s because – BN is not a Fast food chain.
  This could be one area thing. Couldn’t help but mention

Regarding RBA – Today, I am a little less interested to buy than yesterday(2nd November, 2024)

• Tracking
• Looking for go even further before buying again(this time significant). However, thinking of still holding what I had (out of FOMO) bought.

Let me know where I could be wrong. I would love it!!! Thank You

The music label business is not a usual business, where people understand cycles.

I feel this is an unchartered territory. The difficulty in valuing Tips is understanding how long this growth can last. Tips will do 30% topline and bottom line in FY25 for sure. But can they repeat this in FY26 and FY27?
If they can, this is a fair valuation.

If the valuation goes excessive (90-100 PE), one can definitely exit. Because the company will be a 15000 Cr company at that valuation – assuming very bright future in times to come. Risk reward will be quite lopsided.

Happy to hear more views please

What gives them right to win? They have done capex what gives visibility of going ahead to have additional revenue of 150 cr from this? Is there any thing special to them?

Disclosure: new to to the company & studying the company